After touching all-time highs in 2021, shares of a number of Canadian tech shares grossly underperformed the broader markets within the final 15 months. Traders have been fearful concerning the steep valuations surrounding expertise shares, along with a troublesome macro surroundings, dragging share costs considerably decrease.

As an illustration, Shopify (TSX:SHOP) inventory is down 71% from all-time highs, whereas Lightspeed (TSX:LSPD) inventory has pulled again 88% in comparison with report highs. Whereas the fairness market is anticipated to stay unstable within the close to time period, a bull market is inevitable. The time is ripe to go bottom-fishing and purchase TSX shares at a reduction. So, let’s see which beaten-down tech inventory is a greater purchase between Shopify and Lightspeed in April 2023.

The bull case for Shopify inventory

A number one e-commerce platform in North America, Shopify permits companies to create and handle digital shops. The corporate has onboarded over two million retailers searching for its options, together with net design, stock administration, and fee processing onto its platform.

Shopify’s gross sales have surged over 400% within the final 4 years because the COVID-19 pandemic acted as a large tailwind for e-commerce firms. Nevertheless, its top-line progress is now decelerating as Bay Avenue expects Shopify to finish 2023 with income of $9 billion, a rise of 18.4% 12 months over 12 months.

Shopify accounted for 10% of whole on-line gross sales within the U.S. in 2022, making it the second-largest e-commerce platform after Amazon. Furthermore, on-line retail gross sales are forecast to develop greater than 13% yearly by means of 2030. So, Shopify has sufficient room to develop its gross sales over time.

The bull case for Lightspeed inventory

An organization working within the fintech area, Lightspeed Commerce affords a SaaS (software-as-a-service) platform for companies primarily working within the restaurant and retail verticals. This platform permits Lightspeed’s prospects to simply accept funds and simplify operations utilizing capabilities resembling stock administration.

Clients use its suite of merchandise aiming to cut back prices, automate operations, and leverage data-driven insights. Through the years, Lightspeed Commerce has targeted on extremely accretive acquisitions to drive gross sales increased from US$120.6 million in fiscal 2020 (led to March) to US$693 million within the final 12 months. Analysts now count on Lightspeed Commerce to finish fiscal 2023 with gross sales of US$733 million.

Within the December quarter, Lightspeed grew gross sales by 24% 12 months over 12 months to US$188.7 million as gross funds quantity surged 75% to US$3.9 billion. The variety of buyer areas processing over US$500,000 yearly elevated by 15% 12 months over 12 months.

Whereas nonetheless unprofitable, Lightspeed expects to finish fiscal 2024 with breakeven adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization).

The Silly takeaway

Each Shopify and Lightspeed proceed to commerce at a premium. Shopify inventory is valued at 8.7 instances ahead gross sales, whereas this metric is decrease for Lightspeed at 3 instances. Whereas Shopify is forecast to report adjusted earnings of $0.04 per share in 2023, Lightspeed is estimated to finish fiscal 2023 with a lack of $0.27 per share.

When it comes to analyst estimates, Shopify inventory is buying and selling at a reduction of 30%. The upside potential for Lightspeed inventory is far increased at 80%. Nevertheless, I consider Shopify’s wider financial moat and increasing e-commerce presence make it a greater inventory to personal in April 2023.